Conflict Identified as Crypto.com Trading on its Own Platform

In the Philippines, the Department of Budget and Management (DBM) has introduced an on-chain system utilizing the Ethereum layer-2 network Polygon to notarize and track documentation and the expenditure of public funds. The government contracted Manila-headquartered blockchain technology company BayaniChain Ventures in order to implement the system. The firm took to social media on July 31 to provide details on the DBM Blockchain Project.Photo by GuerrillaBuzz on UnsplashBuilding trust into infrastructureBayaniChain Ventures CEO Paul Soliman outlined that the new system “builds trust into the infrastructure itself.” The DBM Blockchain Project connects a DBM internal platform, the Action Document Releasing System (ADRS), which creates official budget documentation, with the Lumen Blockchain-as-a-Service (BaaS) system created by BayaniChain.  Lumen functions as a core framework, enabling government systems to connect securely with blockchain infrastructure. Consequently, Lumen facilitates the tokenization of government documents, managing access to those documents and publishing data to a portal. A third system, Prismo Protocol, interacts with Lumen and ADRS, determining what documentation should be shared with the public and what documentation should remain accessible exclusively to DBM staff.The upshot of the interaction of these systems is that select budget documentation is published to the Polygon blockchain. Soliman stated that the system provides transparency, enabling members of the public to “see proof, not just promises” with regard to the activity of the government department. Integrating blockchain into public governanceThe Undersecretary at DBM, Maria Francesca Montes Del Rosario, took to Facebook on July 30 to confirm that the DBM blockchain initiative had gone live. She described it as the “first ever Transparency Government Blockchain for immutable and verifiable action documents.” She added: “We are using cutting edge technology like AI, blockchain, satellite imaging to enhance how we do public policy and governance.”Del Rosario was quoted by local media as stating that the technology combats the problem of AI deepfakes and fake documents. Another stakeholder in the development of the system was Exakt IT Services, a local company that specializes in assisting government organizations in the Philippines to bring about digital transformation. Exakt was awarded a contract by DBM to act as a technology partner, supporting the project with technical expertise and infrastructure in order to bring about the implementation of the blockchain solution. BayaniChain’s Soliman believes that the new system “sets a precedent for transparency and accountability in public finance.” However, the timing of the launch of the service proved to be unfortunate, as it coincided with an outage suffered by the Polygon network. The outage, which lasted for one hour, disrupted apps running on Polygon. On X, Polygon CEO and Founder Sandeep Nailwal asserted that the incident didn’t prevent the blockchain from operating or producing blocks and with that, user transactions on the network were still being processed.In better news for the blockchain network, Crypto Analyst Lennaert Snyder reported on July 31 that Polygon has reached a yearly high of $1.2 billion in total value locked (TVL), an 80% increase since March.

Industry leaders are turning their attention to Hong Kong as a notable location for spot bitcoin exchange-traded funds (ETFs). That speculation arises in anticipation of the United States granting approval for such ETFs, with Hong Kong emerging as a likely frontrunner in Asia. In a recent report, The Block spoke with a couple of prominent industry stakeholders, who appear to acknowledge the significance of moves towards seemingly expanding crypto ETF product offerings in Hong Kong, even though the bulk of the industry’s attention has been on U.S. spot bitcoin ETF approval.Photo by Simon Zhu on UnsplashU.S. ETF expectationsOn Monday, the research arm of crypto derivatives platform BitMEX calculated that the arrival of such a product in the United States could dwarf the total value locked within existing crypto-related exchange traded products (ETPs). Earlier this month, a researcher at crypto asset manager Bitwise suggested that U.S. spot bitcoin ETFs would be the most successful ETF products ever launched. Acknowledging Hong Kong’s positionWith all the focus on the U.S., could it be that Hong Kong will play a far greater role in the global crypto ETF business? Yat Siu, the chairman of Web3 investor Animoca Brands, highlighted the encouraging position of Hong Kong’s Securities and Futures Commission (SFC) toward digital assets, laying a foundation for potential spot bitcoin ETFs. Referring to the SFC’s recent statement expressing openness to expanding access to digital assets, Siu emphasized the relatively uncontroversial nature of a spot Bitcoin ETF. He noted: “If you look at what the SFC had said about I think a month ago, it says that it was open to widen access to digital assets. And frankly, Bitcoin spot ETF is, I would say, relatively uncontroversial at the end of the day.” Poised to usher in spot ETFsAs the U.S. inches closer to approving its first spot bitcoin ETF, Hong Kong could likely follow suit, benefiting from the groundwork already laid by U.S. regulators. In fact, just last week both local regulators, the Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC), signaled that they are happy to start to accept applications for the provision of crypto-related spot ETFs. Siu pointed out the abundance of public filings and applications that Hong Kong authorities can reference in shaping their regulatory framework. Julia Leung, SFC CEO, stated in November that the regulator was evaluating spot crypto ETFs while expressing openness to proposals leveraging innovative technology for efficiency and enhanced customer experience. Presently, Hong Kong has listed several futures-based crypto ETFs, including the Samsung Bitcoin Futures Active ETF, CSOP Bitcoin Futures ETF and CSOP Ether Futures ETF. Glenn Woo, Head of Sales of APAC at Web3 infrastructure company Blockdaemon, echoed the positive sentiment, noting that while traditional asset managers may have lingering concerns, there is a prevailing appetite for such financial instruments in Hong Kong. Woo, drawing on over a decade of experience in the traditional financial industry in Hong Kong, emphasized the growing interest, anticipating that the appetite will expand further once the U.S. approves its first bitcoin ETF. Hong Kong’s long-standing reputation as a global financial center, combined with the potential of crypto ETF products, will likely boost crypto adoption in the region and the significance of Hong Kong’s role in the sector with it.

In a contrasting move to the recent approval of several spot bitcoin exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC), regulators in both Singapore and Thailand have turned down permission to list spot bitcoin ETFs.Photo by Dmytro Demidko on UnsplashBitcoin not a qualified assetAccording to local news media on Wednesday, Singapore's Monetary Authority (MAS) has announced its decision not to permit the listing of spot ETFs in the country. The MAS argues that cryptocurrencies, including bitcoin, do not meet the criteria for qualified assets within the context of ETFs. This regulatory divergence means that retail investors in Singapore won't see the introduction of spot bitcoin ETFs domestically. However, they still have an avenue to trade such ETFs as they can turn to local brokerages for access to overseas markets. Despite this allowance, the MAS emphasizes the need for these retail investors to exercise caution due to the inherent high volatility and speculative nature of cryptocurrency trading. A spokesperson from the regulatory authority clarified that while collected investment schemes (CIS), falling under the Securities and Futures Act regulation, include ETFs, they do not encompass bitcoin or any other cryptocurrency. Future potentialWhile MAS may be turning down spot bitcoin ETFs at this point, there’s potential for a change of heart in the future. The FIMA Bill is currently working its way through the city-state’s legislative process. If enacted, it would give broader regulatory oversight of crypto to MAS. Lasanka Perera, CEO of Independent Reserve Singapore, recently suggested that the bill could make an ETF more likely. Thailand says noMeanwhile, Thailand’s Securities and Exchange Commission (SEC) has stated that it currently does not plan to allow asset management firms to launch spot bitcoin ETFs in the country. Thai securities brokerage firms have been encouraging investors to consider investing directly in U.S. spot bitcoin ETFs. The Thai SEC clarified that while it closely monitors these developments, there is no immediate policy to allow spot bitcoin ETFs in Thailand. The regulator emphasizes that Thai investors can still engage in digital asset investments through domestic exchanges licensed by the SEC under the Digital Assets Decree. India, too, doesn’t appear to have been looking favorably on the potential for such products. The governor of the Reserve Bank of India (RBI) said last week that “the way we look at crypto remains unchanged, irrespective of who does what.” Asian optimismIn the wake of ETF approval in the U.S., many industry commentators had suggested that Asia would respond positively. Australian venture capitalist Mark Carnegie has suggested that the developing bull market would be “an Asian story.” Yat Siu, co-founder of Hong Kong’s Animoca Brands, expressed the view that U.S. ETF approval would have a substantially positive impact within the Asian region. Hong Kong appears to be the most positive in the region in its outlook with regard to embracing spot bitcoin ETFs. Immediately following approval in the U.S., a Hong Kong legislator spoke out to encourage a proactive response relative to launch of similar products within the Chinese autonomous territory. Meanwhile, recent news reports indicate that spot bitcoin ETFs experienced substantial trading volume, accumulating $10 billion just three days after their approval in the U.S.